Being the ever-observant fellow, even then, I soon noticed in daily perusal of the Gaming Report that the Keno games were quite volatile. [The game of Keno presents 80 numbers, from which the bettor chooses combinations of up to ten or even more numbers, with precise payouts for matches to the numbers drawn each game: 3 of 5, or 6 of 10, etc. Keno has no pari-mutuel payout like today's Lotto-type games.] The natural odds for a Keno ticket were something like 100,000-to-one, while the maximum payout for any one game was then $25,000 (since raised to $50,000 or more).
The progress of the Month-To-Date net on the Keno games was intriguing: if several tickets hit all their numbers one weekend, the results of the Keno game could go negative for the month, and would stay negative for some time. But I noticed, as the casino bosses already knew, that the dollars figure invariably showed positive net numbers by the end of the month. ALWAYS.
The casinos in Nevada are as legitimate as a human institution can be. They police themselves stringently basically out of fear of Federal intervention, but the result is the same as if their motives were pure in heart. The casinos don't need to cheat, it is completely unnecessary, because all that they have to do is attract warm bodies with cash in their pockets to their desert oasis, and those visitors will leave 10 or 15 percent of the casino-table traffic [the 'handle'] in the coffers of the owners of each hotel-casino or 'slot den'. (This is why rooms and food are relatively cheap. The House could make that percentage if they gave away the rooms and food and drinks, which does indeed happen from time to time: high-rollers and conventioneers and others with deep pockets are 'comped' all the time.)
Brokerage houses make their percentage from the traffic, just as in Las Vegas and Atlantic City and on Mississippi riverboats. Though the internet has had its effect with lower brokerage fees, the Big Boys still charge $50 or more per trade. Notice that this daily levy is never reported in summary, just the Dow-Jones average 'on volume of x billion shares'. You will never see a report of the daily brokerage levy, that Goldman Sachs or Charles Schwab made millions of dollars yesterday (net their cost of doing business) because all those shares merely traded ownership.
The Stock Market Casino, precisely like the legal gambling dens of America, is a very simple machine. Customers bring in a ton of money and they leave a portion of it behind, thinking that they had a really good time.
Money goes into the Stock Market Casino, but one question never seems to get asked or answered: Where does all that money go? Every time that somebody wins, somebody else loses; every time somebody loses, somebody else wins their money. Money-value does not appear or disappear based on some fancy chart. The money goes in, and the money goes out. You either win or you lose or you hold, and then you win or you lose.
The Stock Market Casino produces nothing, no actual money-value. Money moves back and forth, salary-men make a living, executives purchase bigger and bigger homes, the economy seems to move nicely but the big money is siphoned off to the Oligarchy.
The Oligarchy makes oodles of money from the Stock Market Casino, just as they do from their holdings in legal gaming casinos. But the Oligarchy is NOT gambling. The Odds Are With The House always and forever. You put money in the machine whether a dollar slot or a mutual fund and some percentage is removed, and the final destination of that levy is the fur-lined pockets of the Oligarchy.
I say that the U.S. economy is a Ponzi scheme because: a) America actually produces hardly anything, shown by our negative ratio of exports to imports, the Trade Balance; and b) if all of the outstanding corporate debt was called for payment, there would be nothing left the Oligarchy already has possession.
Simple Ponzi scheme. The worldwide Great Depression of the early 1930's had the same cause, and the next worldwide Great Depression will similarly blindside the citizenry.
The first debt to be called will be consumer debt; inability to pay off those household debts will cause local institutions to collapse; local problems will tumble larger money-lenders in a 'domino effect', moving from industry to industry and from country to country, eventually bankrupting the Federal Reserve and the whole shebang.
The money goes in the front door of the casino and of the stock market and the customers return home with less than when they started. Every day, every year. From Nevada to Wall Street to Hong Kong to London. The Ponzi scheme will fall apart, the only question is when. And how much of your money disappears into the coffers and counting houses of the Oligarchy.
This plan would return the stock market to its original design: eventual repayment of the invested capital, leaving an autonomous business entity with no outside shareholders to report to. There is no need for outside shareholders, since the Oligarchy owns 50% of everything in America. Make the fat cats of the Oligarchy work to make a buck, no more Stock Market Casino with your hard-earned money. By removing yourself from the Stock Market Casino, you eliminate the chance of the Oligarchy taking their percentage, whether thru brokerage fees or gaming resorts or stock dividends or consumer credit interest. If you do gain possession of your equity a house or land or a small business by eliminating personal and business debt, the Oligarchy cannot get their hands in the till.
Or perhaps it is still exactly like the surprise Tennessee Ernie Ford song hit of October 1955: "You load sixteen tons, and what do you get? / Another day older and deeper in debt / St. Peter, don't you call me, 'cause I can't go / I owe my soul to the company store."
The preceding is an excerpt from Chapter 18 of my forthcoming book, "Working Minds: A Philosophy of Empowerment".
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